Not many people are happy about the massive BP oil spill in the Gulf of Mexico — with the possible exceptions of (1) Elena Kagan, whose confirmation to the Supreme Court is all but guaranteed (since everyone’s too distracted to oppose her); (2) the lawyers who are getting work out of this disaster (as discussed below); and (3) whoever is behind the fake BP Twitter account, which currently has over 167,000 followers.
But today brings some news that might make some people a little less angry at BP. Even though the government probably couldn’t have forced the oil giant to set up a $20 billion fund to pay oil spill claims, for the reasons explained by Professor David Zaring, BP is setting up such a fund voluntarily. The New York Times reports:
The White House and BP agreed on Wednesday that the oil giant would create an independent $20 billion fund to pay claims arising from the worst oil spill in American history.
Bowing to pressure from the Obama administration, the company also said it would suspend paying dividends to its shareholders for the rest of the year and would compensate oil field workers for lost wages.
There are actually several legal angles to the BP drama. For example, who will administer this massive fund? And which firms are getting a piece of all the defense-side action?
The BP fund will be overseen by a lawyer who’s no stranger to high-profile, high-stakes assignments. From the WSJ Law Blog:
And who better to run the fund than Ken Feinberg, the uber-administrator, mediator, and overall justice-dispenser. Feinberg is currently the U.S. government’s pay czar. He also also oversaw the federal government’s compensation fund for victims of the Sept. 11, 2001, terrorist attacks. In 2007 he distributed the money donated to victims of the mass shooting at Virginia Tech and to bereaved families.
And Feinberg isn’t the only lawyer who’s getting a job in the wake of the BP mess. As we mentioned in today’s Morning Docket, last night President Barack “Plug the Damn Hole” Obama announced his tasking of Michael Bromwich, a former Justice Department inspector general and current partner at Fried Frank, with overhauling the problem-plauged Minerals Management Service.
The National Law Journal describes the scope of Bromwich’s mandate:
Bromwich, the Justice Department inspector general from 1994 to 1999, has been asked to develop a plan for a new oversight structure, the White House said. White House officials said Bromwich has a mandate to implement “far-reaching” changes, starting with the Minerals Management Service.
Bromwich is not being named to run MMS directly. On May 28, Interior Secretary Ken Salazar announced that Bureau of Land Management Director Bob Abbey will serve as acting director of the Minerals Management Service.
Interestingly enough, the former head of MMS — Elizabeth Birnbaum, who recently left the agency — was also a lawyer and Harvard Law School graduate.
Meanwhile, over in the private sector, the BP oil spill is generating lots of work for lawyers, on all sides. Plaintiffs’ lawyers are swooping in for the (top) kill, filing hundreds of lawsuits against the company — and using clever ads to find fodder for more.
On the defense side, BP is spreading the wealth of its work across multiple firms. Some beneficiaries of the BP bonanza include:
- Vinson & Elkins, which apparently got the first call;
- WilmerHale, where D.C. power player Jamie Gorelick will oversee BP’s response to congressional inquiries;
- Kirkland & Ellis, which is fighting the venue fight for BP; and
- Akerman Senterfitt, which is representing BP in Florida.
And even though BP (and its hapless executives) are the public face of this disaster, other potential defendants are lawyering up, too:
- Transocean, which owned and leased the Deepwater Horizon rig to BP, has tapped the trio of Skadden, Sutherland Asbill & Brennan, and Hand Arendall.
- Halliburton, which was hired to cement the well, has hired Patton Boggs and Broad and Cassel.
- Cameron International, manufacturer of the failed blowout preventer for the BP well, has turned to Greenberg Traurig and Beck Redden & Secrest.
The BP oil spill: not good for the birds and fishes, but just fine for the sharks.
Can The Government Make BP Set Up A $20 Billion Escrow Fund? [Conglomerate]
As BP Oil Slick Spreads, Firms Follow [Am Law Daily]
BP Agrees to Pay $20 Billion into Compensation Fund [ABA Journal]
Ken Feinberg (Who Else?) To Handle Oil-Spill Escrow Fund [WSJ Law Blog]
BP to Suspend Dividend and Set Up Fund for Oil Spill Claims [New York Times]
Fried Frank Partner to Lead Oil Industry Regulation Reform [National Law Journal]